Warehouse take up set to beat 50 million ft2 record
Knight Frank’s preliminary data shows that take up of warehouse space in Q3 2021 totalled 15.7 million ft2, and predicts that take-up of warehouse space in the UK is set to breach record levels set in 2020.
So far take-up has reached 46.9 million ft2, 27% above the amount leased in the same period in 2020.
“This puts the UK industrial & logistics sector on course for a record year, as the unprecedented levels of occupier demand looks set to ensure that the industry will beat the 51.6m ft2 of space taken in 2020.”
Claire Williams, Industrial Research Lead at Knight Frank, added: “Last mile logistics operators, parcel carriers, supermarkets and retailers have been competing for suitable space in a chronically undersupplied market over the past 18 months. Now with the driver and labour shortage and border delays causing severe disruption, aggravated concerns have caused companies to bring forward warehouse expansion plans across the logistics sector. Many are discovering that quality warehouse space that meets size, location and specification requirements is scarce, given high levels of take up and construction plummeting due to increased costs and lead times for materials.”
The recent supply chain crisis has demonstrated the need for greater supply chain resilience, and this is driving new sources of occupier demand. The shortage of HGV drivers, labour and materials, due to a combination of COVID-19, post-Brexit customs measures, and the Suez Canal blockage earlier this year have highlighted the need for simplified, shorter supply chains and shorter, more direct routes to consumers. Companies have accelerated efforts to secure warehouse space where they can hold high levels of inventory close to consumers, minimise delays and ensure uninterrupted service. Food manufacturing and indoor farming are examples of other occupiers taking space recently.